XRP Lawsuit: Empower Oversight Claims Recent Documents Suggest Conflict Of Interest• May 12, 2022 12:20 pm • Comments
As the XRP’s lawsuit against the SEC continues to develop, more documents have been revealed that could potentially weaken the SEC’s case against Ripple.
The documents in question here involve former SEC director of corporate finance William Hinman and how he may have had a conflict of interest in regards to this case.
The documents were obtained as part of a Freedom Of Information (FOI) request that was submitted by the corruption watchdog organization Empower Oversight.
The organization makes the claim that these documents suggest that Hinman should not have made a speech back in 2018 where he made the statement that Ether was not a security.
This is due to the fact that he had a direct financial interest with the Simpson Thacher law firm which was revealed to be a member of the Enterprise Ethereum Alliance (EEA).
Empower Oversight Requests SEC-OIG Conduct Investigation into the Failure of the SEC’s Ethics Office to Prevent Cryptocurrency Conflicts of Interest by Senior Staffhttps://t.co/fMRPTUN0ov#cryptotrading #crypto #Bitcoin $BTC $ETH $XRP
— Empower Oversight (@EMPOWR_us) May 10, 2022
According to the nonprofit watchdog, Hinman should have recused himself from speaking about Ether due to his undisclosed “direct financial interest” with the Simpson Thacher & Bartlett law firm that is a member of the Enterprise Ethereum Alliance (EEA).
The EEA promotes the use of blockchain technology on the Ethereum blockchain.
John Deaton, founder of legal news outlet Crypto Law lawyer, told his 198,000 Twitter followers on Wednesday that Hinman’s potential compliance failure could jeopardize the SEC’s entire case against Ripple.
If the conflict exists, Deaton said the case could be “game set and match” for Ripple.
According to Law360 — a legal news outlet — Hinman worked at Simpson Thacher before joining the SEC, then rejoined the firm in 2021.
The organization also made the statement about the financial benefits that Hinman was getting from the law firm.
Empower Oversight stated that Hinman got $1.5 million in annual retirement benefits while he was still working at the SEC.
That was also not even the biggest concern though.
The real issue was that Hinman continued to have contact with the law firm even after the SEC had told him to not have any contact from anyone from Simpson Thacher which Hinman had failed to follow.
As a result, Empower Oversight has now submitted a request to the Office of the Inspector General of the SEC to review the ethics of the SEC’s officials.
@EMPOWR_us and @JsnFostr retrieved the emails below. If Hinman didn’t submit the speech to conflicts screening it is game set & match. The Ethics Office is going to be pissed and want to throw him under the bus if we force this investigation through letters from Congress. pic.twitter.com/8j9Nwb0OZn
— John E Deaton (@JohnEDeaton1) May 11, 2022
That assessment would come with the next concerns:
“(1) Perceive the diploma to which the battle involving this former official exacerbated the notion that the SEC’s enforcement actions have selectively focused some cryptocurrencies whereas giving others a free cross;
(2) Clarify to the general public how the SEC’s Ethics Workplace did not successfully guarantee compliance with its clear directives; and (3) Consider the SEC’s insurance policies and procedures to determine methods to extra successfully monitor compliance with ethics steerage.”
(3) Consider the SEC’s insurance policies and procedures to determine methods to extra successfully monitor compliance with ethics steerage.”
This newest improvement within the case is an sudden twist on prime of former SEC official Joseph Corridor’s February prediction that the commission will lose to Ripple based mostly on the deserves of the case.
With this new development in the XRP lawsuit, the fate of possibly the entire crypto industry from regulatory standpoint is at an important decision point.
Hinman doesn’t pass the smell test, sight test or taste test – just like today’s #XRP doesn’t pass the Howey test. https://t.co/8ICWkrrLoA
— John E Deaton (@JohnEDeaton1) May 12, 2022
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